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Thursday 25 February 2016
Three defendants sentenced to prison in Federal court in BeckleyRead the Press Release
BECKLEY, W.Va. – Three defendants were sentenced today in federal court in Beckley, announced Acting United States Attorney Carol Casto.
Rafael Carrera-Fuentes, 36, was sentenced to a year and nine months for possession of a weapon by an inmate of a federal prison. Carrera-Fuentes previously pleaded guilty to the federal crime in November 2015. He admitted that on April 25, 2015, while he was an inmate at the Federal Correctional Institution at Beckley, a Bureau of Prisons staff member discovered a six-inch piece of sharpened metal hidden in his shoe. Carrera-Fuentes further admitted that he possessed the handcrafted weapon, commonly referred to as a “shank.” The new term of incarceration will run consecutive to the sentence of 11 years for a 2011 federal drug conviction that Carrera-Fuentes is currently serving.
John Samuel Lowe, Jr., 35, of White Sulphur Springs, was sentenced to four years and nine months in federal prison for using a phone to facilitate drug trafficking and for simple possession of heroin. Lowe previously pleaded guilty in October 2015 to the federal drug crimes. He admitted that on April 3, 2015, he used a phone in the White Sulphur Springs area to help set up a drug deal with a confidential informant, and that later the same day he distributed heroin to the informant. Lowe further admitted that on April 17, 2015, law enforcement seized a small amount of heroin that Lowe intended to use from his White Sulphur Springs residence.
Stephanie Renee Dunsmore, 30, of White Sulphur Springs, was sentenced to four years in federal prison for using a phone on two occasions to help set up drug transactions with a confidential informant. Dunsmore previously pleaded guilty in October 2015 to the federal drug crimes. She admitted that on March 2, 2015, and again on March 3, 2015, while she was in the White Sulphur Springs area, she called an informant to set up a drug deal, and then later distributed heroin to the informant. She further admitted that her drug crimes involved up to 400 grams of heroin, and that she possessed firearms while involved in her drug dealing activity.
The Carrera-Fuentes case was investigated by the Federal Bureau of Prisons. The cases against Lowe and Dunsmore were investigated by the Greenbrier Valley Drug and Violent Crime Task Force. Assistant United States Attorney John File handled the prosecutions. United States District Judge Irene C. Berger imposed the sentences.
The Lowe and Dunsmore cases were prosecuted as part of the Greenbrier Valley Heroin and Pill Initiative, an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal drug trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Third Defendant Pleads Guilty in Mortgage Loan Modification SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SERJ GEUTSSOYAN, also known as “Anthony Kirk,” 33, of Santa Ana, Calif., pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to conspiring to defraud homeowners across the United States who were seeking mortgage loan modifications.
According to court documents and statements made in court, GEUTSSOYAN and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The defendants did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” “Nation Star Financial,” and “Nation Star Fin Group.”
Acting as representatives of these entities, GEUTSSOYAN and his co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.
In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.
GEUTSSOYAN and others involved in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.
On January 21, 2016, a grand jury in New Haven returned an indictment charging GEUTSSOYAN and six other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26.
GEUTSSOYAN pleaded guilty to one count of conspiracy to commit mail and wire fraud, an offense that carries a maximum term of imprisonment of 20 years. He also has agreed to pay restitution of approximately $3 million. Sentencing is scheduled for May 19, 2016.
Two other defendants, Mehdi Moarefian, a.k.a. “Michael Miller,” 36, and Daniel Shiau, a.k.a. “Scott Decker,” 30, both of Irvine, Calif., pleaded guilty to the same charge last week.
To date, investigators have seized approximately $350,000 from various bank accounts, approximately $362,000 from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.
This matter is being investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.
The case is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and Sarah P. Karwan.
Texas Tax Return Preparer Indicted for Preparing False Income Tax ReturnsRead the Press Release
A Houston, Texas, income tax return preparer was indicted by a federal grand jury today in the Southern District of Texas on 18 counts of aiding and assisting in the preparation of false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
The indictment alleges that Felix Martin prepared false and fraudulent individual income tax returns for others for the tax years 2009 and 2010. It is alleged that these tax returns included false education and American Opportunity credits, as well as false statements regarding business income.
If convicted, Martin faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of false tax returns, as well as potential fines and restitution to the Internal Revenue Service (IRS).
An indictment merely alleges that crimes have been committed and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Michael Hatzimichalis and Mara Strier of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Ten Charged for Drug Conspiracy Operating in Union CountyRead the Press Release
CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced that 10 individuals are facing multiple federal drug charges for their involvement in a drug conspiracy operating in Union County. Nine of the 10 charged are in custody. A criminal indictment was returned on February 17, 2016, and was unsealed in federal court following today’s arrests.
C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina; Sheriff Eddie Cathey of the Union County Sheriff’s Office; and Chief Bryan Gilliard of the Monroe Police Department join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the criminal indictment, from on or about May 2003 to November 10, 2015, the defendants operated as a drug conspiracy responsible for trafficking at least 136 kilograms of cocaine and 53 kilograms of crack cocaine, primarily in and around Union County.During this morning’s round-up, law enforcement also recovered six handguns.
The 10 defendants named in the 67-count indictment are each charged with conspiracy to distribute crack cocaine and related drug offenses. They are:
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Ernest Cuevas Bivens, 34, of Waxhaw, N.C. (arrested today)
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Robert Doneil Clyburn, Jr., 26, of Monroe, N.C. (arrested today)
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Jeffrey Darrell Crowder, Jr., 29, of Wingate, N.C. (arrested today)
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Ruthus Azam Ivey, 31, of Monroe. (arrested today)
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Dario Kinta Richardson, 30, of Mineral Springs, N.C. (arrested on 2/22/16)
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Quantravis Lavar Richardson, 28, of Monroe. (arrested today)
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Reginald Donovan Richardson, 31, address unknown, (arrested today).
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Adrian Lamar Sanders, 33, of Monroe. (previously in state custody)
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Maurice Dupree Starnes, 36, of Monroe. (arrested today)
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Eric Scott Truesdale, 45, address unknown. (not arrested yet)
(See chart below for federal charges and penalties for each defendant).
The arrests are the result of mutgny investitontargeted the trafficking of cocaine and crack cocaine in and around Union County ondutedy, the Union County Sheriff’s Office, and the Monroe Police Department, with the assistance of the North Carolina State Bureau of Investigation (SBI) and the North Carolina Division of Community Corrections.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement, U.S. Attorney Rose said, “This morning’s arrests are part of my office’s ongoing effort to combat drug trafficking throughout our district.The law enforcement agencies that participated in this OCDETF investigation joined forces to fight drug distribution and to put an end to the violence that comes with drug trafficking.”
“These individuals were the target of our joint investigation because they distributed large quantities of cocaine and crack in the Union County area. ATF will continue to work with our federal, state and local law enforcement partners to remove drug traffickers and their co-conspirators from our communities,” said ATF Special Agent in Charge Hyman.
“These federal charges should send a clear message to drug traffickers in North Carolina. The FBI and our law enforcement partners will not tolerate the damage that drugs do in our communities because some drug dealer wants to make a quick buck,” said FBI’s Special Agent in Charge Strong.
“I am grateful for all the federal, state and local agencies that assisted in this investigation,” said Sheriff Cathey.“I want to assure the public that the Sheriff’s Office will continue to partner with other agencies to eradicate drug traffickers from Union County and to make our county a safer place to live.”
“This investigation was a great team effort and I credit all agencies involved for its successful outcome. Everyone’s hard work and cooperation enabled us to conduct a thorough investigation across jurisdictional boundaries with outstanding results. I would also like to remind citizens that anyone with information concerning drug activity is encouraged to contact anonymously the Monroe Police Department at 704-282-4700,” said Chief Gilliard.
The defendants will appear in federal court before a U.S. Magistrate Judge in Charlotte. The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Rose thanked all the law enforcement agencies for their assistance in this ongoing investigation.
Assistant U.S. Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
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Tarkio High School Student Charged with Possessing Machine GunsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Tarkio R-1 High School student who brought a loaded semi-automatic pistol to school earlier this month, causing the school to be locked down, has been charged in federal court with illegally possessing two machine guns that were found at his residence.
Michael T. Knoth, 19, of Tarkio, Mo., was charged with two counts of possessing a machine gun in a criminal complaint filed in the U.S. District Court in Kansas City, Mo., on Wednesday, Feb. 24, 2016. Knoth, who has been in state custody since his arrest on Feb. 11, 2016, was transferred to federal custody today for his initial court appearance. Knoth remains in federal custody pending a detention hearing.
According to an affidavit filed in support of the federal criminal complaint, Knoth – who came to school on Feb. 11, 2016, wearing military-style clothing, boots and ballistic body armor – reportedly displayed a fully loaded magazine to another student that day. That student alerted a teacher, and the school contacted the Tarkio, Mo., Police Department. School officials then discovered a loaded Glock 9mm semi-automatic pistol in Knoth’s backpack, along with six loaded 9mm pistol magazines, three loaded .223- or .556-caliber magazines, a spring-assisted knife, a seatbelt cutter and a window punch.
Knoth was arrested and handcuffed. The school was placed on lockdown.
Investigators searched Knoth’s vehicle, which was parked in the school parking lot. They found two loaded 9mm magazines and 15 loaded .223/.556-caliber magazines.
Investigators also searched Knoth’s home. During a search of the southwest bedroom, investigators found a loaded machine gun in the closet, an AR-style .223/.556 pistol, containing no visible serial numbers or manufacturer stamp. They found a second machine gun, an UZI-style 9mm firearm (unknown manufacture), in the dresser. Investigators found a receipt from M&A Parts, Inc., which listed various firearm parts, including an M16 LPK part kit with auto sear. (An auto sear is a device used to turn a semi-automatic rifle into a fully automatic rifle.) Investigators also found numerous rounds of ammunition and numerous loaded .223/.556 and 9mm magazines throughout the residence.
Dickinson cautioned that the charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the Tarkio, Mo., Police Department, the Atchison County, Mo., Sheriff’s Department, the Missouri State Highway Patrol and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Tampa Man Pleads Guilty for His Role in Scheme to Steal More Than $2 Million in Social Security ChecksRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Richard Lee Anderson (37, Tampa) today pleaded guilty to receiving stolen government property. He faces a maximum penalty of 10 years in federal prison. Anderson also faces drug and firearms charges in a separate federal case (8:15-CR-473-T-35AEP).
According to the plea agreement, between May and October 2012, Anderson received stolen Social Security benefit checks, totaling at least $2,275,000, from a United States Postal Service mail handler who worked at the Processing and Distribution Center (PDC) facility in St. Petersburg. The checks were all addressed to beneficiaries living in Pinellas County. Anderson then sold the checks to various individuals for a percentage of their face value and those individuals, in turn, cashed the checks or employed others to do so for them. Anderson paid the mail handler a percentage of the checks’ face value.
This case was investigated by the Social Security Administration Office of the Inspector General, the United States Postal Service Office of Inspector General, the United States Postal Inspection Service, and the Tampa Police Department. It is being prosecuted by Assistant United States Attorney Patrick Scruggs.
Statement by Attorney General Loretta E. Lynch on the Departure of Kelly T. Currie from the U.S. Attorney’s Office for Eastern District of New YorkRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the departure of Kelly T. Currie of the Eastern District of New York:
“Kelly Currie is a consummate public servant: dedicated, selfless, and fair. As a senior advisor to former U.S. Senator George Mitchell, Kelly played a crucial role in achieving the Good Friday Agreement, which brought lasting peace to the people of Northern Ireland and the United Kingdom. During two stints as an attorney in the Eastern District of New York – including his tenure as my Chief Assistant during my time there as U.S. Attorney – he was instrumental to the office’s prosecution of cases involving corruption, securities fraud and terrorism. And when I became Attorney General last April, Kelly graciously served as Acting U.S. Attorney – a role he filled with characteristic skill, energy and integrity. Through these and many other contributions, Kelly has helped to make our country – and our world – safer and more just. I want to thank him for his outstanding work, and I wish him the best as he begins a new chapter in his career.”
St. Thomas Man Sentenced to 34 Months in Prison for Firearms Conspiracy and Related ChargesRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez sentenced today Tequan Joseph, 23, to 34 months’ imprisonment and three years of supervised release for conspiracy to ship firearms with obliterated serial numbers, unlawful transportation of firearms, and a Middle District of Florida charge of false statements in connection with the purchase of firearms, United States Attorney Ronald W. Sharpe announced. Judge Gomez ordered Joseph to pay a $300 special assessment and to perform 400 hours of community service.
On October 26, 2015, Joseph pleaded guilty to conspiracy to ship firearms with obliterated serial numbers, unlawful transportation of those firearms, and to a Middle District of Florida charge of false statements. According to the plea agreement filed with the court, between August 6, 2013, and October 7, 2013, Joseph conspired with other individuals to unlawfully mail two firearms with obliterated serial numbers from Jacksonville, Florida, to St. Thomas. A total of six firearms were shipped and recovered during that period. The investigation revealed that Joseph had bought all six guns from a licensed firearms dealer in Jacksonville, Florida. Joseph is not a federally licensed firearms dealer and is not authorized to possess the firearms in the Virgin Islands.
“Trafficking in firearms is the first step in the cycle of violence that’s plaguing our communities. We stand with our law enforcement partners to combat violent gun crime and those who want to destroy our communities,” said Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in-Charge Carlos A. Canino.
This case was investigated by ATF and the U.S. Postal Inspection Service. It was prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Sentencings for February 18 - February 25, 2016Read the Press Release
Patrick Dort, 44, of Odessa, New York, was sentenced by Federal District Court Judge Alan B. Johnson on February 25, 2016, for failure to register as a sex offender. Dort was arrested in Ithaca, New York. He received 22 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $200.00 fine and a $100.00 special assessment. This case was investigated by the U.S. Marshals Service.
Ricky Lee Good Left, 33, of Fort Washakie, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 24, 2016, for felony child abuse. Good Left was arrested in Fort Washakie, Wyoming. He received 16 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 fine and a $100.00 special assessment. This case was investigated by the Federal Bureau of Investigation.
Robert James Ybarra, 28, of Riverton, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 24, 2016, on two counts of distribution of methamphetamine. Ybarra was arrested in Casper, Wyoming. He received 41 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Luke Horneck, 22, of Casper, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on February 23, 2016, for travel with intent to engage in illegal sexual conduct. Horneck was arrested in Casper, Wyoming. He received five months imprisonment, to be followed by five years of supervised release, and was ordered to pay restitution in the amount of $4,877.40 and a $100.00 special assessment. This case was investigated by the Casper Police Department, the Natrona County Sheriff’s Office and the Federal Bureau of Investigation.
Ashley Larae Tidzump, 33, of Fort Washakie, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 19, 2016, for assault with a dangerous weapon with intent to do bodily harm. Tidzump was arrested in Fort Washakie, Wyoming. She received 31 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Bureau of Indian Affairs.
JC Christopher Pulham, 43, of Evanston, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 18, 2016, for possession of child pornography. Pulham was arrested in Evanston, Wyoming. He received 97 months imprisonment, to be followed by 10 years of supervised release, and was ordered to pay a $300.00 fine and a $100.00 special assessment. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Michael Miles, 67, of Las Vegas, Nevada, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on February 18, 2016, for sexual contact with a minor. Miles was arrested in Las Vegas, Nevada. He received 60 months imprisonment, to be followed by ten years of supervised release, and was ordered to pay a Victims of Trafficking Act special assessment of $5,000.00 and restitution in the amount of $514.00. This case was investigated by the Federal Bureau of Investigation.
Russellville Man Indicted for String of 2015 Bank RobberiesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Russellville man for a string of bank robberies and attempted bank robberies in north Alabama this past fall, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
A six-count indictment filed in U.S. District Court charges KERRY DEWAYNE HARBIN, 45, with four counts of bank robbery and two counts of attempted bank robbery between Sept. 1 and Oct. 15.
The indictment charges Harbin with robbing the BBVA Compass Bank on State Farm Parkway in Homewood on Sept. 1, the Union State Bank on Lorna Road in Hoover on Sept. 10, the Wells Fargo Bank on West Valley Avenue in Homewood on Sept. 17, and the Cullman Savings Banks on Second Avenue in Cullman on Oct. 14. The indictment also charges Harbin with attempted bank robbery at the BB&T Bank on Red Lane Road in Birmingham on Sept. 9 and the BBVA Compass Bank on Green Springs Highway in Homewood on Sept. 10.
The maximum penalty for bank robbery and attempted bank robbery is 20 years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney William G. Simpson is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Rochester Man Sentenced to 39 Months on Bank Robbery ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE: Thomas Hegarty, 21, of Rochester, New Hampshire, was sentenced in the United States District Court for the District of New Hampshire for bank robbery, announced United States Attorney Emily Gray Rice. The Court imposed a term of 39 months imprisonment, three years of supervised release, and full restitution to the victim bank.
Hegarty walked into a Bank of America in Rochester, New Hampshire, on January 20, 2015, held an object under his sweatshirt to simulate a weapon, and handed the teller a note demanding money. He then made off with $400 in stolen funds. Surveillance cameras captured images of the robbery and law enforcement quickly identified Hegarty. He was apprehended later that day.
This case was investigated by the Rochester Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Georgiana Konesky.
Richmond Man Sentenced for Conspiring to Distribute over 80 Kilograms of MarijuanaRead the Press Release
NEWPORT NEWS, Va. – Michael Newman, 37, of Richmond, was sentenced today to 70 months in prison for conspiring to distribute marijuana and ethylone.
Newman was found guilty on Oct. 22, 2015. According to court documents, James City County Police encountered Newman and another individual parked at a closed gas station in James City County on May 10, 2015, and found Newman to be in possession of marijuana, ethylone, drug scales and more than $3,000 in cash. The marijuana and ethylone were both intended for distribution, and Newman admitted to federal agents that he had been selling drugs since his release from state custody. Newman is responsible for a converted drug weight of between 80 and 100 kilograms of marijuana.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; David G. Bowers, Acting Inspector in Charge of the U.S. Postal Inspection Services’ Washington Division; and Bradley Rinehimer, Chief of James City County Police, made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorney Eric M. Hurt prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15cr56.
Rhode Island Resident Admits Distributing Child PornographyRead the Press Release
PROVIDENCE, R.I. – Adam C. Cobb, 47, of Portsmouth, RI, pleaded guilty in federal court in Providence on February 24, 2015, to one count of child pornography. Cobb was arrested in April 2015, following an investigation by agents from Homeland Security Investigations (HSI) and members of the Rhode Island State Police Internet Crimes Against Children Task Force (RI ICAC).
Cobb’s guilty plea is announced by United States Attorney Peter F. Neronha; Matthew J. Etre, Special Agent in Charge of HSI for New England; and Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police.
According to court documents and information presented to the court, in January 2015, The National Center for Missing and Exploited Children reported to the RI ICAC that an individual in Rhode Island uploaded images of child pornography to Tumblr.com. The investigation determined that an Internet address at Adam Cobb’s Portsmouth residence was the address used to upload the images.
On March 5, 2015, ICAC Task Force members and HSI agents, supported by Naval Criminal Investigative Service agents, executed a court-authorized search warrant at Cobb’s Portsmouth residence and seized various digital media, computers and cellular phones. Additionally, the next day, a cell phone was seized from Mr. Cobb by Customs and Border Patrol agents at the Dallas/Fort Worth International Airport as Mr. Cobb entered the United States, having traveled from Tokyo, Japan.
A forensic examination of the digital media seized resulted in the discovery of photos and videos of child pornography depicting two juvenile females. With the assistance of the Baltimore, Maryland Police Department and HSI offices in Baltimore and in London, England, the RI ICAC determined the identity of both females. Investigators determined that both juvenile females were known to Mr. Cobb.
Adam Cobb, who was arrested on April 3, 2015, charged by way of a federal criminal complaint, is detained in federal custody. He is scheduled to be sentenced on May 19, 2016, by U.S. District Court Judge John J. McConnell, Jr.
The case is being prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
Prosecution of Tax Cases Continues as Filing Season is UnderwayRead the Press Release
DENVER – U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announce the prosecution of several recent criminal tax offenders in the District of Colorado. With tax filing season in full swing, federal officials remind citizens that it is important to file complete and accurate tax returns and choose wisely when selecting a return preparer. Those who commit tax fraud and related crimes can and will be criminally prosecuted. Recent tax cases prosecuted in the District of Colorado include the following:
Erica Godoy, age 39, of Tucson, AZ pled guilty on February 18, 2016 before U.S. District Court Judge Christine M. Arguello to conspiracy to defraud the IRS. In the State of Colorado and elsewhere in January of 2010 through April of 2014, Erica Godoy and her husband conspired to defraud the IRS in the assessment and collection of personal income taxes for calendar years 2010 through 2013. During this time period, her husband owned and operated a semi-truck which he used to transport illicit loads of narcotics from the Tucson area to the Philadelphia area. Several months into their marital relationship, Godoy learned he was making income from such activity. They conspired together to ensure that the IRS was not aware of the income being generated from the illicit activity. Specifically, Godoy, failed to file any personal income tax returns for calendar years, 2010 through 2013 while her husband filed false income tax returns as "married filing jointly", listing a former ex-wife. Those joint returns, failed include any of the substantial income that he was generating from his illicit drug distribution. Godoy’s failure to file income returns and pay income taxes over the four years resulted in a tax loss to the IRS of $244,674. This case is being prosecuted by Assistant United States Attorney Tim Neff.
Hieu Mattison, age 52, of Lakewood, CO, had his initial appearance on February 18, 2016 before U.S. Magistrate Judge Kristen L. Mix. Mattison was indicted by a Federal Grand Jury in Denver on January 28, 2016 for preparing and filing false income tax returns. From February 2010 through May 2012, Hieu Mattison, falsely prepared and filed with the IRS twenty-four U.S. Individual Form 1040 Income Tax Returns for various taxpayers in calendar years 2009, 2010 and 2011. The returns were materially false and fraudulent. Specifically, the returns included false income and tax credits in an effort to created inflated fraudulent refunds. This case is being prosecuted by Assistant United States Attorney Martha A. Paluch.
Robert and Lorrie Marie Gomez, age 60 and 57, of Henderson, Colorado, pled guilty on February 20, 2016 before U.S. Magistrate Judge Kristen L. Mix to two counts of failing to file tax returns. Robert and Lorrie are husband and wife and have co-owned and operated Gomez Burritos since 2004. Gomez Burritos is a Mexican food restaurant that serves breakfast and lunch six days a week with four storefront locations in the Denver, Colorado metro area since 2004. Between April 2008 and January 2014, Robert and Lorrie failed to pay the IRS Gomez Burritos' payroll taxes, which totaled $484,396. This amount includes both the employees' share that was withheld by Gomez Burritos from its employees' paychecks and the employer's share of payroll taxes. This case is being prosecuted by Assistant United States Attorney Pegeen D. Rhyne.
Kathy Jo Eads, age 58, of Aurora, Colorado, pled guilty on February 24, 2016 to preparing and filing a false income tax return. Beginning in January 2010 and continuing through April 2013, conducting business as Money Matters Financial Services, Eads prepared 33 false federal income tax returns for 15 clients which included either a false Schedule C or a false Schedule C-EZ. All 33 false returns requested refunds, and the IRS paid 28 of them in full and the other five refunds were applied against previous taxes that the taxpayers owed. The 33 false returns resulted in a tax loss of $96,376. Eads charged her clients a return-preparation fee which varied. On one occasion a client went to Eads’ office to get her 2010 refund, and Eads suggested that the client cash the check at a nearby check-cashing business, but the client declined, Eads asked, "Where's my tip?" The client thought the question was a joke and walked out of the office, but Eads became upset and followed her into a parking lot, where she told her, "The only reason I put the business on your tax return was because I wanted a thousand dollars out of it." This case is being prosecuted by an Assistant United States Attorney in the Economic Crimes Section.
“Individuals who commit tax fraud are not only defrauding the government, but they are also stealing from their friends, family and neighbors. We owe it to every American taxpayer to identify and prosecute those who evade their taxes and defraud the IRS,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
For tips on choosing a Tax Professional and filing your return go to www.irs.gov.
The charges contained in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Prison Term and Nearly $1 Million in Judgments Ordered Against Midamar Founder, Midamar, and ISARead the Press Release
William B. Aossey, Jr., age 74, of Cedar Rapids, Iowa, the founder of Midamar Corporation (Midamar) and ISA, Inc. (d/b/a Islamic Services of America, Inc.), who was convicted in July of last year of 15 counts of conspiracy, making false statements on export certificates, and wire fraud, was sentenced today to serve two years in federal prison. The corporate entities founded by Aossey were also sentenced.
A 19-count Indictment was filed against Aossey on October 23, 2014. Aossey was released on pretrial supervision subject to special conditions pending trial. A federal jury convicted Aossey on 15 of the 19 counts on July 13, 2015. He was acquitted on four counts alleging money laundering and conspiracy to commit money laundering. After the jury returned its verdict, the Court held a detention hearing and ordered Aossey held without bond pending further court order.
On July 22, 2015, the Court ordered Aossey detained pending sentencing and in its written Order found that Aossey “must remain detained pending sentencing because he has not established by clear and convincing evidence that he is not likely to flee if released under suitable conditions.” The Order also noted that Aossey had not earned the trust of the Court since he had violated the terms of his pretrial release by failing to notify his probation officer of contact with law enforcement. This failure related to local, state and federal law enforcement raiding his business while investigating illegal firearm shipments to Lebanon.
Evidence at trial showed that foreign governments imposed strict requirements on the import of religiously slaughtered halal beef. In addition to prescribing the approved methods of slaughter, the governments of Indonesia and Malaysia restricted halal beef imports to those products that originated from slaughter facilities specifically inspected and approved by each country. Midamar, a halal food distribution company, directed its employees to change markings on packages of beef product originating from an unapproved slaughter facility to make it appear as if the products originated from an approved slaughter facility.
As part of the scheme to ship misbranded meat products, USDA export documents were falsified and fake health certificates were generated by Midamar and ISA employees USDA, Food Safety and Inspection Service (FSIS) letterhead. ISA was responsible for certifying that the product originated from an approved facility, among other things. As a result of the fraud committed by Aossey, Midamar, and ISA, 22 shipments of beef products not otherwise eligible for import into Malaysia and Indonesia were accepted into commerce in those countries, contrary to the regulations of those countries. The scheme continued for about two and a half years.
Midamar and ISA each previously pleaded guilty to one count of conspiracy to: commit mail and wire fraud; cover up material facts by a scheme; make and use false statements and documents in a matter within the jurisdiction of the U.S. Department of Agriculture; make false statements on export certificates with the intent to defraud; and, sell misbranded meat in interstate commerce with the intent to defraud. The scheme to which Midamar and ISA pleaded included the acts charged against Aossey as well as numerous other fraudulent acts and practices concerning the sale and certification of halal beef around the world over about a five year period.
Aossey was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. He was sentenced to 24 months’ imprisonment and fined $60,000. Aossey was also ordered to forfeit $184,983 representing proceeds of the fraud. In addition, he was ordered to pay costs of prosecution of $16,824 and a special assessment of $1500. Aossey will be required to serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
At the sentencing hearing, the court found Aossey repeatedly perjured himself at his trial and thereby sought to obstruct justice. The court also found the scheme was sophisticated. However the court varied down from a guideline sentencing range of 87-108 months, citing Aossey’s advanced age and lack of criminal history.
Midamar was fined $20,000 and ordered to forfeit $600,000. Midamar was also placed on probation for five years. As a special condition of probation, Midamar will be require to abide by all terms of a consent decree entered into with the USDA Food Safety Inspection Service. The consent decree requires Midamar to take a variety of corrective actions and to remove certain corporate officials including Jalel Aossey and William B. Aossey from the business. Midamar was also ordered to pay a special assessment of $400.
ISA was fined $60,000 and ordered to pay special assessment of $400. ISA was also ordered to forfeit $600,000. The forfeiture judgment was ordered joint and several with Midamar. ISA must also abide by a 5 year term of probation.
United States Attorney Kevin W. Techau stated following sentencing, “These are serious offenses that were not an aberration—something that occurred once or twice. This defendant’s conduct was orchestrated, coordinated and planned. Most importantly, the conduct was driven by greed.” Techau went on to note, “Mr. Aossey directed his employees to change labels and falsify accompanying records to get beef products into foreign countries contrary to the import restrictions of those countries. By doing this, he placed his profit motive above the interests of foreign consumers of halal beef who wrongly believed the products they purchased and consumed had originated from slaughter facilities that met the strict religious slaughter requirements imposed, and specifically approved, by the regulatory agencies in each country.”
“IRS Criminal Investigation is committed to unraveling complex financial transactions and schemes of this nature to assist our law enforcement partners,” said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. “The proceeds of illegal activity are used as fuel to continue their criminal conduct.”
Aossey is being held in the United States Marshal’s custody until he can be transported to a federal prison.
Aossey’s sons Jalel, age 41, and Yahya, age 46, also both from Cedar Rapids, have also been convicted in connection with same scheme as Midamar and ISA. Their sentencing date is March 11, 2016.
The case was prosecuted by Assistant United States Attorney Richard L. Murphy and Timothy L. Vavricek and investigated by the United States Department of Agriculture Office of Inspector General Investigations and Internal Revenue Service Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers: 14-CR-00116-LRR (William B. Aossey, Jr.); 14-CR-00138-LRR (Midamar & ISA).
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Portsmouth Man Pleads Guilty to Armed RobberyRead the Press Release
NORFOLK, Va. – Sherrod Cannon, 24, of Portsmouth, pleaded guilty today to conspiracy to interfere with commerce by means of robbery and to brandishing a firearm during a crime of violence. The charge stems from three separate armed robberies Cannon committed in Portsmouth and Chesapeake in April 2015.
Cannon was indicted by a federal grand jury on Oct. 22, 2015. According to court documents, videotape surveillance at the third 7-Eleven that was robbed showed Cannon’s co-conspirator casing the store just minutes before Cannon entered and pointed a revolver at the employees. Shortly after the robbery, officers identified two suspects matching the description provided by the victim, who later identified Cannon as the gunman. Police found cash matching the amount taking from the registers evenly split between Cannon and his co-conspirator. Cannon also had a $2 bill, which the victim confirmed was stolen from the cash register during the robbery. Police later recovered the loaded .38 caliber revolver that was used during the armed robbery.
The date and location of each robbery is listed below:
Date
Location
April 10, 2015
7-Eleven, 5001 Portsmouth Boulevard, Portsmouth
April 13, 2015
7 Eleven, 3445 Western Branch, Chesapeake
April 27, 2015
7-Eleven, 3500 Deep Creek Boulevard, Portsmouth
Cannon faces a mandatory minimum penalty of seven years in prison, and a maximum penalty of life in prison when he is sentenced on June 2, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) Washington Field Division; Kelvin L. Wright, Chief of Chesapeake Police; and Tonya D. Chapman, Chief of Portsmouth Police, made the announcement after the plea was accepted by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Andrew C. Bosse and Joseph E. DePadilla, and Special Assistant U.S. Attorney John F. Butler are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-121.
Pekin Man Pleads Guilty to Distribution of Child Pornography and Impersonating a U.S. MarshalRead the Press Release
Peoria, Ill. – Arthur D. Wheeler, 30, of the 600 block of Harberts, South Pekin, Ill., pleaded guilty in U.S. District Court today to one count of distribution of child pornography and one count of impersonating a federal officer. Wheeler entered his plea before Chief U.S. District Judge James E. Shadid. The agreement includes a stipulated sentence of 20 years in federal prison for distributing child pornography to run concurrent with a sentence of three years for impersonating a federal officer, subject to acceptance by the court. Sentencing has been scheduled for June 23, 2016.
Assistant U.S. Attorney Ronald L. Hanna is prosecuting the case. The charges are the result of an investigation conducted by the U.S. Secret Service; task force members of the Central Illinois Cyber Crime Unit, including the Peoria County Sheriff’s Office and the Bloomington Police Department; the Pekin Police Department; Illinois State Police; and the U.S. Marshal’s Service.
According to court documents, in May 2015, Wheeler obtained nude photos from a minor female in Missouri by receiving them on his phone and by accessing the minor’s Facebook account. Wheeler appeared June 1, 2015, in the Circuit Court of Tazewell County seeking an order of protection against the minor’s family. Wheeler stated to the court that the minor’s family had threatened him because of his communications with the minor during the preceding two weeks. During the court proceeding, Wheeler produced his phone, which was ultimately seized and examined by law enforcement. The forensic review revealed that on three separate occasions, in late May and early June 2015, Wheeler used the cellphone’s text function to send naked images of the minor to approximately 120 people in the area code where the minor lives.
Wheeler also acknowledged during his plea hearing that on June 1, 2015, he impersonated a U.S. Marshal in an attempt to get information from an individual about the minor’s whereabouts.
Wheeler is a registered sex offender as a result of a prior conviction for a sex crime involving a minor in Illinois in 2011. He has remained in the custody of the U.S. Marshals Service since he was arrested on Aug. 24, 2015.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
North Carolina Man Sentenced for Bank FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Kelly Atkinson, 32, of Raleigh, N.C., who was convicted of conspiracy to commit bank fraud, was sentenced to 12 months in prison by U.S. District Judge, Richard J. Arcara. The defendant has also been ordered to pay $443,995 in restitution.
Assistant U.S. Attorney Maura K. O'Donnell, who handled the case, stated that the defendant conspired with Brian Avery Smith, a Buffalo man, who was also convicted of bank fraud, to defraud credit unions and other lenders of hundreds of thousands of dollars. The scheme was accomplished through the submission of fraudulent loan applications, which claimed to be for the purchase of automobiles, computers, and furniture, along with fraudulent supporting documentation for the loans.
To accomplish the scheme, Atkinson and Smith also opened bank accounts in Buffalo in the names of fictitious companies. Much of the loan proceeds were distributed into these accounts and retrieved by Atkinson and Smith.
The sentencing was the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Nine Defendants in Vast Cocaine Conspiracy SentencedRead the Press Release
G.F. “Pete” Peterman, III, Acting United States Attorney for the Middle District of Georgia, announced that nine defendants in a far-reaching conspiracy to distribute cocaine were sentenced as of Wednesday, February 25, 2016, by the Honorable Hugh Lawson, Senior United States District Judge. These individuals and their respective sentences include:
Andrew Carter, age 38 of Omega, Georgia- 360 months
Juan Pablo Cuevas, age 54 of Atlanta, Georgia - 240 months
Maurice Todd Carter, age 35 of Omega, Georgia- 240 months
Jose Alfredo Martinez, age 40 of Omega, Georgia- 200 months
Kenyatta Mitchell, age 33 of Tifton, Georgia- 150 months
Lataris Waters, age 26 of Omega, Georgia- 60 months
Jessica Tellez, age 32 of Omega, Georgia- 66 months
James Waters, age 52 of Tifton, Georgia- 60 months, and
Juan Sanchez Hidalgo, 57 of Tifton, Georgia- 42 months.
From January 1, 2013, through October 28, 2014, the defendants acquired kilogram quantities of cocaine ultimately distributed throughout Cook, Colquitt and Tift County, Georgia. Between August 29, 2014, and September 28, 2014, intercepted communications revealed Defendants acquired between 10 to 15 kilograms of cocaine per week. On September 25, 2014, a traffic stop of Jose Martinez, Jessica Tellez, and Juan Sanchez Hidalgo resulted in the seizure of $225,937 of drug money en route to Juan Pablo Cuevas. Search warrants executed that same date on residences of Maurice Todd Carter, James Waters, and other defendants resulted in the seizure of an additional approximately $50,000, 3 kilograms of cocaine and 11 firearms.
“The teamwork of local, state and federal law enforcement, working together, shut down this major drug running business in South Georgia. There is no parole in the federal prison system. With these sentences, our community, our citizens and our children will be safe from the criminal activities of these individuals for up to thirty years in the case of the ring leader. This is outstanding work by our law enforcement officers and prosecutors,” stated Acting U.S. Attorney G.F. Peterman, III.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division stated, “Today is a victory, not only for the multitude of law enforcement agencies who dismantled this organization, but for the citizens of the affected communities. Now that these criminals have been removed from the streets, our communities are much safer. This effort would not have been successful without the high-level of cooperation between our federal, state and local law enforcement counterparts.”
“This investigation is an example of local, state, and federal law enforcement agencies working together to make a positive impact in the local communities of southwest Georgia. The blending of these resources has resulted in the successful dismantling and prosecution of a major drug trafficking organization,” commented Special Agent in Charge Kim Baker of the GBI Region 15 Field Office.
“This is the result of a unified effort to combat illegal drugs in Tift County. I want to thank all agencies and their personnel for their dedicated service to our community,” said Sheriff Gene Scarbrough of the Tifton County Sheriff’s Office.
The case was investigated by the Drug Enforcement Administration, Georgia Bureau of Investigation, Mid-South Narcotics Task Force, and the Tift, Crisp, Cook, and Colquitt County Sheriff’s Offices. Assistant United States Attorney Julia Bowen is handling the prosecution for the Government.
Inquiries regarding the case should be directed to Pamela Lightsey at the United States Attorney’s Office at 478-752-3511.
New Orleans man pleads guilty to possessing fake credit/debit cardsRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that a New Orleans man pleaded guilty to possessing dozens of fake credit and debit cards.
Terrance Milton, 23, of New Orleans, La., gave a conditional guilty plea before U.S. Magistrate Judge Kathleen Kay to one count of possession of 15 or more counterfeit or unauthorized access devices. The plea will become final when accepted by Judge Patricia Minaldi. According to the guilty plea, Milton was traveling with the driver of a vehicle May 15, 2014 on Interstate 10 eastbound in Calcasieu Parish when the vehicle was stopped for a traffic violation. The law enforcement officer found 36 credit/debit cards on Milton’s person. The defendant also possessed a fake driver’s license matching the fictitious name printed on the credit/debit cards.
Milton faces up to 10 years in prison, three years of supervised release and a $250,000 fine. A sentencing date of June 2, 2016 was set.
The U.S. Secret Service conducted the investigation. Assistant U.S. Attorney Jamilla A. Bynog is prosecuting the case.
New Orleans East Man Pleads Guilty to Heroin ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that KENNETH MIXON, age 31, of New Orleans, pled guilty yesterday to conspiracy to distribute and to possess with the intent to distribute heroin.
MIXON is facing a maximum sentence of twenty years in prison and a possible fine up to $1,000,000. U.S. District Judge Ivan L.R. Lemelle set sentencing on May 25, 2016.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the New Orleans Police Department in investigating this matter. Assistant United States Attorney Brandon S. Long is responsible for the prosecution.
New Jersey Man Guilty of $148 Million Investment Fraud SchemeRead the Press Release
Baltimore, Maryland – Jonathan E. Rosenberg, age 47, of West Orange, New Jersey, pleaded guilty today to conspiring to commit wire fraud in connection with a complex scheme to defraud investors and lenders by selling fraudulent investment portfolios of debts purportedly owed by hospital patients. Rosenberg has agreed to the entry of an order to pay restitution of $148,251,859, the amount of the investors’ losses.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
“Jonathan Rosenberg and his co-conspirators perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $148 million,” said U.S. Attorney Rod J. Rosenstein. “The conspirators pretended that they were repaying investors with revenue earned by collecting patient debts, but they were really using the money of new victims to repay previous investors.”
Rosenberg and co-conspirator Douglas Kuber operated Account Receivable Services, LLC (ARS) in New York, New York. Beginning in February 2007, they entered into an agreement with International Portfolio, Inc. (IPI), which was operated by co-defendant Robert Feldman and Feldman’s business partner, to promote the sale of IPI debt portfolio. Pursuant to their agreement, IPI acquired accounts receivables from hospitals (past due patient accounts), bundled them into investment portfolios, and then sold the portfolios to ARS at a discounted rate. ARS’s purchases of the medical debt portfolios from IPI came from investors who agreed to lend money to ARS on a fixed-term basis in return for a high, fixed interest rate. IPI agreed to manage the collection activity for each debt portfolio that IPI sold. Any funds collected by IPI were to be forwarded to escrow accounts opened and maintained by ARS, which, in turn, would use the funds to cover the periodic interest payments and outstanding balances owed to the investors.
Fraudulent Inflation of Purchase Prices for IPI Debt Portfolios to Obtain Larger Investor Loans
According to his plea agreement, Rosenberg and Kuber misrepresented to investors that a loan secured by IPI debt portfolios would not be used to pay up-front fees and commissions associated with the investment offering. In fact, however, ARS and IPI devised an elaborate process involving the use of multiple escrow accounts and independent accountants to feign a transparent tracking of the deposit of the loan proceeds, the revenue from collection activity, the repayment of interest, and the sale of portfolios. Funds to pay a 5% to 10% fee would come from the investor’s loan proceeds. Pursuant to this undisclosed fee arrangement, ARS and IPI would agree to a concealed purchase price for a debt portfolio. Then they would tell the investor that the portfolio price was 5% to 10% higher than concealed price.
IPI agreed to kickback the loan proceeds in excess of the true purchase prices to Rosenberg and Kuber. The kickbacks were characterized as a refund or a rebate. In so doing, ARS and IPI avoided the intricate escrow arrangement they had created to convince investors to finance the joint venture. From June 2007 to March 2009, Rosenberg and Kuber made kickbacks of investor loan proceeds to themselves totaling in excess of $8 million.
In reliance on those misrepresentations, investors provided loans to ARS of approximately $145 million to purchase IPI debt portfolios, which IPI managed. Other investors purchased approximately $122,500,000 worth of IPI debt portfolios, which IPI also managed.
Fraudulent Inflation of Collection Results
In order to induce existing investors to maintain and increase their participation in the investment scheme and to persuade new investors to join, ARS and IPI falsely represented the amount of income being generated from the collection activity for the medical debt portfolios. It became apparent almost from the start that collections were significantly inadequate, not only in their failure to cover periodic interest payments that ARS owed its investors, but also to repay the investors’ principal.
Rosenberg agreed that IPI would advance ARS the money needed to make ARS’s periodic interest payments to the investors. From July 2008 to December 2009, and without the investors’ knowledge, Rosenberg, Feldman and Kuber wired or caused to be wired approximately 209 advances from IPI into the bank accounts of the ARS debt portfolios, which were subsequently used to pay periodic interest payments due to an investor and/or inflate the collection history of the respective investor debt portfolios. Misleading collection reports were created to deceive the investors.
After their plan to subsidize ARS with monthly advances was implemented, an investor was induced to fund the purchase of 12 more portfolios between July and November 2008, totaling approximately $65 million in new investments. Another investor representative living in West River, Maryland was induced to fund the purchase of a portfolio on November 8, 2008 for $10 million, and another portfolio on May 26, 2009 for $5 million.
To conceal poor collection results and artificial resale prices for IPI debt portfolios, and to assure a continuing flow of new funding into the investment scheme, Rosenberg, Feldman, and Kuber continued to solicit existing and prospective investors to purchase or finance IPI debt portfolios. In so doing, they fraudulently used new investor funds to make interest and resale payments in order to meet the investment benchmarks of prior investors.
Rosenberg Owned Three Other Companies that Purchased IPI Debt Portfolios
Finally, Rosenberg owned and controlled three other companies that recruited investors for medical accounts receivable portfolios purchased from IPI: JER Receivables, LLC (JER); International Portfolio Access, LLC (IPA); and Receivable Partners, LLC.
A wealth management company owner (Owner) invested with JER under an agreement which was structured as a loan but provided a guaranteed 30% rate of return over 16 months. From July 2008 to February 2010, the wealth management company invested $18.7 million in nine transactions with JER to purchase portfolios of health care accounts receivable from IPI. JER used all of the proceeds to purchase medical debt portfolios from IPI, and the wealth management company made a $930,000 profit from two of the transactions. In October 2010, however, the wealth management company issued demand notices to JER on a number of the outstanding transactions due to JER failing to make required payments.
The Owner formed a new wealth management company which entered into a $750,000 loan agreement with IPA in October 2009. The loan was to be used to secure a larger credit line to purchase additional healthcare accounts receivable portfolios. The credit line never materialized. From February 2011 to January 2012, this new company made a series of loans totaling $18.6 to Receivable Partners. These loans were used to pay back some of the investors of the original wealth management company who purchased portfolios through JER.
Rosenberg faces a maximum sentence of 20 years in prison. U.S. District Judge James K. Bredar scheduled sentencing for June 14, 2016, at 9:30 a.m.
Robert Feldman, age 68, of Beach Haven, New Jersey, and Douglas A. Kuber, age 55, of Livingston, New Jersey, previously pleaded guilty to their participation in the conspiracy and face a maximum sentence of 20 years in prison. Feldman and Kuber are scheduled to be sentenced on June 2 and 30, 2016, respectively.
Co-defendant Richard Shusterman, age 53, of Highland Beach, Florida, has pleaded not guilty to charges filed against him relating to the scheme. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein thanked the FBI and HSI Baltimore for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.
New Cumberland Defense Depot Worker Indicted on Indecent Sexual Contact ChargesRead the Press Release
HARRISBURG - The U.S. Attorney’s Office for the Middle District of Pennsylvania announced today that a former worker at the DLA Distribution Center Susquehanna in New Cumberland was indicted yesterday by a federal grand jury in Harrisburg on charges he had illegal and unwanted sexual contact with three co-workers.
According to United States Attorney Peter Smith, Ricardo Reyes, age 35, of Harrisburg, Pennsylvania was an employee at the Defense Distribution Center Susquehanna in New Cumberland and in June of 2015, Reyes allegedly had indecent, unwanted sexual contact with three women, identified by the grand jury only by their initials.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is a 2 year term of imprisonment on each count, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The case was investigated by the DLA Office of Inspector General. Prosecution of the case has been assigned to Assistant United States Attorney William A. Behe.
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Nashville Woman Sentenced to Five Years in Prison for Trying to Bribe WitnessRead the Press Release
NASHVILLE, Tenn. – February 25, 2016 – Laquanda Boyce,33, of Nashville, Tenn., was sentenced today to serve five years in prison for her role in attempting to bribe the victim of a shooting, announced David Rivera, United States Attorney for the Middle District of Tennessee. Boyce pleaded guilty on September 4, 2015, to conspiracy to tamper with a witness. The shooter, Michael Calloway, was sentenced last week to serve 15 years in prison for being a felon in possession of ammunition, conspiracy to tamper with a witness and attempting to obstruct justice.
According to the statement of facts, on the morning of April 12, 2015, Calloway and Boyce were assaulting a woman at the J.C. Napier housing development when another person intervened and tried to protect the woman being assaulted. Later in the afternoon, Calloway and Boyce returned with Calloway carrying a firearm. Upon seeing the witness again, Calloway fired eight or nine shots at him, striking him once in the leg. The gunshot victim was treated at Vanderbilt Hospital and subsequently identified Calloway as the shooter.
Calloway was arrested the following day and learned that he would likely face federal firearms charges. He and Boyce then devised a scheme to pay the witness $1200 in exchange for his refusal to testify or for testifying that he had mistakenly identified Calloway as the person who had shot him.
Calloway and Boyce were subsequently indicted on witness tampering and obstruction charges.
These cases were investigated by the Metropolitan Nashville Police Department Gang Unit and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant United States Attorney Sunny A.M. Koshy.
NY Man Arraigned in RI in Alleged Conspiracy to House Sophisticated Marijuana GrowsRead the Press Release
PROVIDENCE, R.I. – Samin Chang, 38, of New York, NY, was arraigned in U.S. District Court in Providence, RI, today on charges that he allegedly participated in a conspiracy to house numerous sophisticated indoor marijuana grow operations inside a converted Providence mill building and a Providence residence. In August 2015, federal, state and local law enforcement discovered at least 1,400 marijuana plants in various stages of growth located inside the former mill building and the residence.
Named with seven others in a four-count superseding indictment returned on February 16, 2016, Samin Chang is charged with conspiracy, using and maintaining a drug involved premises, and manufacturing more than 100 marijuana plants. A not guilty plea was entered at Chang’s arraignment before U.S. District Court Magistrate Judge Patricia A. Sullivan, at which time the government alleged that Chang was the leader of the conspiracy.
Chang was arrested in New York City on February 16, 2016, on a federal arrest warrant issued by the U.S. District Court in Rhode Island. He has been detained in federal custody since his arrest.
The superseding indictment and Chang’s arraignment are announced by United States Attorney Peter F. Neronha; Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI; Michael Ferguson, Special Agent in Charge of the DEA’s New England Field Division; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Police Chief Colonel Hugh T. Clements, Jr.
On August 12, 2015, FBI agents, assisted by the DEA, Rhode Island State Police and the Providence Police Department, executed nine court authorized search warrants in and around a former mill building at 725 Branch Avenue in Providence, where it is alleged that law enforcement discovered at least 1,400 marijuana plants in various stages of growth. The grows were located inside numerous, otherwise vacant, apartments and offices inside the converted mill building. A tenth search warrant was executed at a residence at 60 Valley Street in Providence, where law enforcement discovered approximately 100 marijuana plants in various stages of growth. Law enforcement also seized a significant quantity of equipment and supplies allegedly used in the cultivation of marijuana plants.
Also named in the superseding indictment are Richard A. Yang, 36, Ilhwan Cha, 33, Ki T. Kwon, 32, Brian Lee, 28, Zipora Sardjuli, 55, Doddy Sambuaga, 45, and Irwan Anwar, 53, all of New York, NY.
While executing the court authorized search warrants inside the converted mill building, law enforcement seized a .22 caliber firearm and ammunition. The owner of the building, William L. Ricci, 69, of Providence, was charged by way of a criminal complaint with being a felon in possession of a firearm. According to a plea agreement filed with the court, Ricci has agreed to plead guilty to a charge of being a felon in possession of a firearm. A change-of-plea hearing has been scheduled for March 11, 2016.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Midland Woman Sentenced to Five Years in Federal Prison for Wire Fraud Scheme and Obstructing JusticeRead the Press Release
In Midland today, 55-year-old former federal fugitive Judy Kay Fryar was sentenced to five years in federal prison for her role in a wire fraud scheme that caused an estimated $140,000 loss to her employer and for obstructing justice announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division, United States Marshal Robert Almonte and Midland Police Chief Price Robinson.
In addition to the prison term, United States District Judge Robert A. Junell ordered that Fryar pay $138,589 restitution and be placed on supervised release for a period of three years after completing her prison term.
On December 9, 2015, Fryar pleaded guilty to one count of wire fraud and one count of obstruction of justice. By pleading guilty, Fryar admitted that from October 2009 to June 2011, she devised a scheme to embezzle money including monthly lease payments owed to her employer, SKP Holdings in California.
According to court records, Fryar, as the former onsite property manager for the West Park Apartments in Midland, repeatedly accepted cash payments from tenants and used those monies for her own personal benefit. Fryar also altered various tenant lease payments in the company’s online property management records in an attempt to conceal her scheme. Fryar’s scheme was revealed in 2011 when an owner who was conducting an on-site visit encountered a West Park Apartment tenant attempting to make a rental payment with cash.
According to the factual basis filed in this case, Fryar obstructed justice by falsely fabricating a medical condition to obtain favor, sympathy and ten consecutive continuances between January 2013 and July 2015 for jury selection and trial on the above mentioned wire fraud charge. The Court reset jury selection and trial dates based on materially false representations that Fryar had been diagnosed with Stage 4 Lung Cancer and was undergoing extensive radiation, chemotherapy and other experimental treatments. According to Fryar, her alleged cancer progressed to the point that she no longer had sufficient mental and physical abilities to effectively participate in a trial. During this time, Fryar forged two letters and medical records from M.D. Anderson Cancer Center to support her materially false representations. Prior to the filing of her first of ten continuance motions, on August 30, 2012, M.D. Anderson Cancer Center notified Fryar that she was negative for carcinoma, melanoma and sarcoma, thus, Fryar did not require cancer treatment and/or any other related services at M.D. Anderson Cancer Center.
On July 21, 2015, Fryar was arrested by the U.S. Marshals Lone Star Fugitive Task Force at her family’s lake house in Coke County following the issuance of a bench warrant after she failed to appear in court for a pre-trial hearing earlier in the month. She has remained in custody since her arrest.
This investigation was conducted by the Federal Bureau of Investigation, Midland Police Department Fraud Unit and the United States Marshals Service. Assistant United States Attorneys Yvonne Gonzalez and Stanley Serwatka prosecuted this case on behalf of the Government.
Mescalero Apache Man Sentenced to 78 Months for Federal Voluntary Manslaughter ConvictionRead the Press Release
ALBUQUERQUE – Jerrick Blake, 22, a member of the Mescalero Apache Nation who resides in Mescalero, N.M., was sentenced this morning in Las Cruces, N.M., to 78 months in federal prison followed by three years of supervised release for his voluntary manslaughter conviction.
According to court filings, Blake killed the victim on the afternoon of Nov. 3, 2014, by stabbing him in the chest with a knife. The crime occurred during an argument between Blake and the victim on the Mescalero Apache Reservation in Otero County, N.M.
On June 16, 2015, Blake pled guilty to a felony information charging him with voluntary manslaughter. In entering his guilty plea, Blake admitted killing the victim by stabbing him in the chest during a sudden quarrel.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and the Mescalero Apache Tribal Police Department. Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
Member of Cherry Hill Group ‘UDH’ Pleads Guilty to Racketeering Conspiracy, Including MurderRead the Press Release
Baltimore, Maryland – Cornell Harvey, a/k/a “Little Head,” age 28, of Baltimore, pleaded guilty today to conspiracy to participate in a racketeering enterprise in connection with his gang activities as a member of the UDH organization, which operates in the Cherry Hill section of Baltimore. Harvey also admitted his participation in a murder.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn Mosby.
“Disputes between rival drug gangs lead to many shootings and murders in Baltimore City,” said U.S. Attorney Rod J. Rosenstein. “Thanks to a lengthy and intensive investigation, we will hold accountable the criminals who turned Cherry Hill into a war zone.”
According to his plea agreement, from at least 2007 to 2013 Harvey was a member of the UDH organization, which operates in the area of Cherry Hill known as “Up the Hill” or “Up da Hill.” UDH members and associates have been in a long-running dispute with members of an organization known as “Coppin Court” that is involved in criminal activity in the part of Cherry Hill known as “Down the Hill,” and since at least January 2011, have been in a dispute with members of “Little Spelman,” another organization that is involved in criminal activity in the Down the Hill section of Cherry Hill. UDH members and associates used violence and intimidation to protect themselves, the organization, and their control of the drug trade in part of Cherry Hill.
Harvey admitted that as a member of UDH he sold crack cocaine, heroin and other narcotics with UDH members. In addition to selling drugs, Harvey admitted that on October 5, 2010, he and co-defendant Dominic Evans committed an armed robbery of two individuals who were selling marijuana in the area, but who were not UDH members. After stealing $150 from one of the victims, Harvey began to shoot at the two individuals. One of the victims was shot once and survived his wound, but the other victim, who was shot at least three times, died from her wounds. The murder was captured on CCTV. A Baltimore City jury acquitted Harvey and Evans of this murder.
Finally, on January 29, 2011, at approximately 1:30 am, Harvey, and other gang members were arrested riding around Cherry Hill in a 1997 green Cadillac Seville stolen just over 24 hours earlier. Upon trying to stop the vehicle, a chase ensued, and all four occupants bailed out in the rear of the 2800 block of Bookert. Harvey was chased by an officer who saw him toss a fully loaded 9mm .357 Glock firearm. Officers also recovered from the vehicle: a box containing 39 rounds of .38 special ammunition; a plastic bag containing 33 rounds of 9mm ammunition; a ski mask; and a glove.
According to Harvey’s plea agreement, the green Cadillac Seville was stolen late on January 27, 2011, after the victim was approached by three men as he was filling the vehicle at a gas station at North Avenue and McCulloh Street, in Baltimore City, Maryland. The three men asked the victim for a ride. Shortly thereafter in the 1800 block of Eutaw Place, the men donned masks and the victim was ordered out of the vehicle at gunpoint where he was shot and left for dead.
Throughout the course of Harvey’s involvement in the UDH drug conspiracy Harvey knew that the conspiracy involved between 840 grams and 2.8 kilograms of crack cocaine and between 3 and 10 kilograms of heroin
Harvey and the government have agreed that if the Court accepts the plea agreement Harvey will be sentenced to 262 months in prison. U.S. District Judge George L. Russell, III has scheduled sentencing for June 17, 2016, at 11:00 a.m.
Co-defendant Dominic Evans, a/k/a “FlatLine,” age 25, of Baltimore, previously pleaded guilty to his role in the racketeering conspiracy and was sentenced to 30 years in prison.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith, Seema Mittal, and Patricia C. McLane, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
McAlester Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that MALCOLM DEWAYNE ELLIS, age 38, of McAlester, Oklahoma pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
The charge is a result of an investigation by the McAlester Police Department. The defendant was indicted in January, 2016.
The Indictment alleged that on or about April 6, 2015, within the Eastern District of Oklahoma, the defendant, MALCOLM DEWAYNE ELLIS, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, to-wit: One (1) Bersa, Model Mini 9 Firestorm, 9mm caliber semi-automatic pistol, serial number 621726, manufactured in Argentina, Imported by “RSA Enterprises INC”, which had been shipped and transported in interstate commerce.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
Assistant United States Attorney Dean Burris represented the United States.
Massachusetts Company Pleads Guilty in Connection with Disadvantaged Business Enterprise FraudRead the Press Release
BOSTON – Transit Safety Management, Inc., a Georgetown, Mass. consulting company, pleaded guilty today to making a false statement in connection with its certification for favored contracting status.
Transit Safety Management, Inc. (TSM), pleaded guilty to one count of making a false statement to a state agency in order to maintain its status as a "disadvantaged business enterprise" (DBE). U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for May 25, 2016.
In order to qualify as a DBE, a company’s management must be controlled by a socially or economically disadvantaged individual such as a woman or minority. The purpose of the program is to give an economic advantage to minorities and women who run their own companies. However, the manager of the DBE cannot also engage in employment that would prevent him or her from devoting sufficient attention to the affairs of the DBE. In this case, investigators discovered that TSM’s purported owner was a full-time employee of a federal agency and the business was really operated by her husband making it ineligible for certification as a DBE.
TSM provided consulting services to the railroad industry, focusing on safety and operations management. Shortly after it was founded in 1999, TSM's owner certified the company as a "disadvantaged business enterprise" (DBE). As a result, TSM was able to take advantage of federal regulations aimed at promoting the participation of minority and disadvantaged businesses in federally-funded public construction contracts. Under the DBE regulations, a contractor to transportation projects must either subcontract a percentage of its work to a DBE or show that it made a good faith effort to subcontract work to a DBE but was unable to do so. This requirement makes the DBE status a valuable and potentially lucrative designation.
In order to maintain its DBE certification, TSM had to make yearly affirmations that it was still eligible and that nothing had changed that would affect its eligibility for the favored DBE status. Despite this, TSM lied about whether it met the criteria for DBE status. According to court documents, TSM’s owner was hired as a full-time employee with a federal agency in 2005. As a full time federal employee, TSM’s purported manager could not control TSM under the regulations. Nevertheless, TSM failed to disclose this change and continued to make its yearly affirmations to maintain is DBE status.
As part of its plea agreement, TSM has agreed to pay a fine of $84,000 and dissolve its operations.
United States Attorney Carmen M. Ortiz; Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Maryland Woman Pleads Guilty to Conspiring to Taking Part in Scheme Involving Prescription and Health Care FraudRead the Press Release
WASHINGTON - Claire Elizabeth Rice, 68, of Silver Spring, Md., pled guilty today to federal charges of conspiracy to obtain controlled substances by prescription fraud and participating in a health care fraud scheme, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.
Rice entered the plea in the U.S. District Court for the District of Columbia. She faces a maximum sentence of four years in prison for the conspiracy count and up to 10 additional years for the health care fraud scheme. The Honorable Richard J. Leon scheduled sentencing for June 3, 2016. As part of the plea agreement, Rice also agreed to pay $16,175, representing her share of illegal proceeds obtained from two health care plans.
Both offenses were charged in a federal indictment returned in 2014. In her plea, Rice admitted to a statement of offense under oath concerning her conduct. From 2008 through 2013, Rice presented and filled 91 forged prescriptions for drugs, including oxycodone, a synthetic opiate, in the name of a practicing cardiologist with offices in Northwest Washington. Rice was never a patient of this doctor.
According to the statement of offense, Rice got the prescriptions from her co-defendant, Novella White. White, 53, also known as Novella Brown, of Accokeek, Md., has denied her role in the offenses and is facing a jury trial set for April 18, 2016. White was a former employee of the cardiologist, and according to the doctor, did not have authority to write prescriptions for herself or for Claire Rice. White is charged with presenting forged prescriptions for oxycodone and other drugs in her own name.
Rice caused the forged prescriptions that she obtained to be billed to health care plans such as Express Scripts and Blue Cross and Blue Shield. The health plans were defrauded the costs of filling these various prescriptions.
In announcing the guilty plea, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Special Agent in Charge DiGiulio commended the work of those who investigated the case from the FBI’s Washington Field Office and the HHS Office of the Inspector General. They also expressed appreciation for the work of Assistant U.S. Attorneys John P. Dominguez and Jennifer Kerkhoff, who prosecuted the case.
Marion Man Sentenced on Federal Firearm and Drug ChargesRead the Press Release
Contact Person: Chris Taylor (843) 665-6688
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Gabriel Emanuel Foxworth, age 27, of Marion, South Carolina, was sentenced to a total of 156 months imprisonment in federal court in Florence, South Carolina. Foxworth’s term of imprisonment will be followed by an appropriate term of supervised release. In October 2015 Foxworth pled guilty to possession with intent to distribute marijuana and possession of a firearm in furtherance of a drug trafficking crime, all in violation of 21 U.S.C. § 841(a)(1)(b)(1)(C) and 18 U.S.C. § 924(c)(1)(A). Chief United States District Judge R. Bryan Harwell of Florence sentenced Foxworth to 36 months for the marijuana charge and 120 months for the firearm charge.
Evidence presented at the earlier change of plea hearing established that on August 27, 2014, a Marion County Combined Drug Unit officer saw Foxworth driving a car on Gregg Avenue. Foxworth was stopped and subsequently arrested because his license was suspended and police had an active warrant for his arrest. During a pat down search of Foxworth, police found a 9mm pistol loaded with 14 rounds of ammunition in Foxworth's waistband. Police searched Foxworth’s car and located a quantity of marijuana inside the car. Foxworth has prior convictions for distributing cocaine (2007) and possession with intent to distribute marijuana (2012).
The case was investigated by agents of the ATF and Marion County Combined Drug Unit. This case was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Christopher D. Taylor of the Florence office prosecuted the case.
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Man Pleads Guilty to Intentionally Crashing into an Oklahoma Highway Patrol Vehicle During an Interstate Drug RunRead the Press Release
Oklahoma City, Oklahoma – On February 23, 2016, PATRICK SAMIR ASFOUR, age 39, of Palm Coast, Florida, pled guilty to traveling interstate to commit violence in furtherance of a drug offense, possessing marijuana with intent to distribute, and carrying a gun during a drug trafficking crime, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma. With respect to the first crime, Asfour admitted that he intentionally struck an Oklahoma Highway Patrol trooper’s vehicle while the trooper was conducting a traffic stop in connection with the drug trafficking.
According to a superseding indictment filed in January 2016, Asfour and a co-defendant transported marijuana from California to Florida in January 2015 by using two cars, a scheme called “tandem driving.” Asfour’s co-defendant drove a “load” car that carried approximately 136 pounds of hydroponic marijuana with an estimated value of $400,000 and a 9mm pistol. Asfour drove an “escort” vehicle. Asfour and his co-defendant agreed that the escort vehicle would strike a law enforcement cruiser if the load vehicle was pulled over. They hoped this would create a diversion that would allow the load vehicle to slip away.
On January 30, 2015, the load vehicle committed a traffic violation as it was traveling eastbound on Interstate 40 in Canadian County, Oklahoma. As an OHP trooper stopped the load car, Asfour crashed the escort vehicle into the OHP cruiser. Asfour and the co-defendant were arrested and charged with drug trafficking and weapons violations.
At sentencing, Asfour faces up to 20 years in prison on the interstate-travel count, plus three years of supervised release and a $250,000 fine. He also faces up to 30 years in prison on the possession-with-intent-to-distribute count, in addition to three years of supervised release and a $1,000,000 fine. Finally, he will be sentenced to at least five years in prison and possibly up to life imprisonment on the firearm count, a sentence which will run consecutive to the sentences for all other counts, in addition to five years of supervised release and a $250,000 fine.
Reference is made to the superseding indictment and other public filings for further information.
This case is the result of an investigation by the Oklahoma Highway Patrol; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration. It is being prosecuted by Assistant U.S. Attorneys Edward J. Kumiega and Nicholas J. Patterson.
Lufkin, Texas, man pleads guilty to possession with intent to distribute cocaineRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Lufkin, Texas, man pleaded guilty to possessing cocaine.
Laraymeon Jevon Watson, 21, of Lufkin, pleaded guilty before U.S. District Judge S. Maurice Hicks Jr. to one count of possession with intent to distribute cocaine. According to the guilty plea, Watson received cocaine powder and Ecstasy pills from a supplier in Texas. When his vehicle was stopped on June 24, 2015 near Greenwood, La., for a traffic violation, approximately 8 ounces of cocaine powder and more than 3,000 Ecstasy pills were found. He later admitted he planned to sell the drugs.
Watson faces up to 20 years in prison, three years of supervised release, a $1 million fine and restitution. A sentencing date of June 1, 2016 was set.
The defendant was arrested as part of Organized Crime Drug Enforcement Task Force (OCDETF) Operation “River City Blues.” The DEA, the Louisiana State Police, and the Lufkin Police Department investigated the case. The OCDETF program is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for targeting national and regional level drug trafficking organizations, coordinating the necessary law enforcement entities and resources, and disrupting and dismantling of major drug trafficking organizations.
Assistant U.S. Attorney James G. Cowles Jr. is prosecuting the case.
Logan County man sentenced to over three years in Federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Logan County man was sentenced to three years and seven months in federal prison for distribution of oxymorphone, announced Acting United States Attorney Carol Casto. William Toler, Jr., 29, of Chapmanville, previously pleaded guilty to the federal drug crime in August 2015.
Toler admitted that on April 10, 2014, he sold a 40 mg oxymorphone pill to a confidential informant working with law enforcement. The drug deal took place at a residence near Chapmanville. Toler further admitted that he was responsible for over 20 grams of oxymorphone and over 20 grams of oxycodone during the course of his drug dealing activity. During the sentencing hearing, the Court noted that Toler had been a significant law enforcement problem in his community and a substantial source of prescription pills.
This case was investigated by the West Virginia State Police and the U.S. Route 119 Drug Task Force. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This prosecution was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Lewiston Man Sentenced to Nine Years for Drug TraffickingRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Akylle Murchison, 24, of Lewiston, Maine, was sentenced today in U.S. District Court by Judge George Z. Singal to nine years in prison and five years of supervised release for conspiracy to distribute cocaine and cocaine base (also known as crack cocaine) and possession with intent to distribute bk-MDEA (a bath salt). He pleaded guilty to the charges on May 27, 2015.
According to court records, between 2011 and 2014, Murchison and others obtained cocaine and crack cocaine in Massachusetts and brought the drugs to Maine for distribution in Androscoggin County. On July 23, 2014, law enforcement officers executed a search warrant at a residence in Lewiston. Murchison fled out the back door when police entered. Police seized bk-MDEA and over $53,000 in drug proceeds during the search.
This case was investigated by the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency, the Maine State Police, the Auburn and Lewiston Police Departments, and the Androscoggin County Sheriff’s Office. This investigation is part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Lewiston Man Sentenced to 14 Years for Drug TraffickingRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Romelly Dastinot a/k/a “Marcus,” 35, of Lewiston, Maine, was sentenced yesterday in U.S. District Court by Judge Jon D. Levy to 14 years in prison and three years of supervised release for conspiracy to distribute cocaine base (also known as crack cocaine), heroin and oxycodone. He pleaded guilty on April 17, 2015.
According to Court records, between 2012 and 2014, Dastinot was a leader of a drug trafficking organization that transported crack cocaine, heroin and oxycodone from Massachusetts to Androscoggin County, Maine, for further distribution. Twelve co-defendants have already been sentenced in connection with this investigation. Three other co-defendants await sentencing.
This case was investigated by the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency, the Maine State Police, the Auburn and Lewiston Police Departments, and the Androscoggin County Sheriff’s Office. This investigation is part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Las Cruces Man Sentenced to Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Ramiro Saenz, 28, of Las Cruces, N.M., was sentenced yesterday in federal court to 72 months in federal prison followed by three years of supervised release for violating the federal firearms laws.
Saenz was arrested in Sept. 2014, on a criminal complaint charging him with being a felon in possession of firearms and ammunition in Doña Ana County, N.M. According to the complaint, on Aug. 21, 2014, an officer of the Las Cruces Police Department recovered 1.6 grams of methamphetamine, a handgun and multiple rounds of ammunition from Saenz during a routine traffic stop.
Saenz was subsequently indicted on the same charge on Dec. 10, 2014. The indictment indicated that Saenz was prohibited from possessing firearms or ammunition because he previously had been convicted twice of being a felon in possession of a firearm and ammunition, aggravated assault and tampering with evidence. On March 12, 2015, Saenz pled guilty to the indictment.
This case was investigated by the Las Cruces office of Homeland Security Investigations and the Las Cruces Police Department and was prosecuted by Assistant U.S. Attorney Randy M. Castellano of the U.S. Attorney’s Las Cruces Branch Office.
KC Man, Woman Charged with Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., couple were charged in federal court today for robbing the U.S. Bank inside the Price Chopper grocery store on 103rd Street in Kansas City, Mo., on Saturday afternoon.
Austin D. Bales, 23, and Sherry L. Ridout, 22, both of Kansas City-North, were charged with bank robbery in a federal criminal complaint filed in the U.S. District Court in Kansas City, Mo.
According to an affidavit filed in support of today’s criminal complaint, Ridout approached a bank teller at U.S. Bank, 1030 W. 103rd St., at approximately 3:50 p.m. Saturday, Feb. 20, 2016. Ridout, talking on her cell phone, reached into her left jacket pocket and produced a note, which she placed on the teller counter. Ridout allegedly told the teller to give her all of the money from the top drawer. The note, according to the affidavit, said something along the lines of: “We have the bank surrounded, won’t hesitate to come back there, only clean bills, keep your hands visible, money is replaceable, Lifes aren’t.”
The teller gave Ridout $1,500, the affidavit says.
After bank surveillance photos of Ridout were broadcast by local media, the affidavit says, investigators received several phone calls that identified her as the robber and identified Bales as her boyfriend.
On Wednesday, Feb. 24, 2016, police officers conducted a traffic stop near the Walmart at 5261 N.E. Antioch Rd., Kansas City, Mo., of a van that matched the description of a vehicle identified in connection to the bank robbery. A witness had told investigators she saw Ridout being dropped off and later picked up by a van that fled the area after the robbery. When police officers stopped the van yesterday, it was being driven by Bales’s father with Bales and Ridout in the back seat.
Law enforcement officers searched the residence of Bales’s father, where Bales and Ridout were living in the basement, and found a Walmart bag containing apparent shredded U.S. currency and a Sucrets box containing a white substance that field tested positive for amphetamine.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the Kansas City, Mo., Police Department and the FBI.
Justice Department Reaches Agreement with the City of Miami and the Miami Police Department to Implement Reforms on Officer-Involved ShootingsRead the Press Release
The Justice Department has reached a comprehensive settlement agreement with the city of Miami and the Miami Police Department (MPD) resolving the Justice Department’s investigation of officer-involved shootings by MPD officers, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
The settlement, which was approved by Miami’s city commission today and will go into effect when the agreement is signed by all parties, resolves claims stemming from the Justice Department’s investigation into officer-involved shootings by MPD officers, which was conducted under the Violent Crime Control and Law Enforcement Act of 1994. The investigation’s findings, issued in July 2013, identified a pattern or practice of excessive use of force through officer-involved shootings in violation of the Fourth Amendment of the Constitution.
The city’s compliance with the settlement will be monitored by an independent reviewer, former Tampa, Florida, Police Chief Jane Castor. Under the settlement agreement, the city will implement comprehensive reforms to ensure constitutional policing and support public trust. The settlement agreement is designed to minimize officer-involved shootings and to more effectively and quickly investigate officer-involved shootings that do occur, through measures that include:
- enhanced supervision of first-line officers;
- enhanced training, including de-escalation training;
- improvements to internal investigations of officer-involved shootings;
- a more stringent mechanism under which a shooting officer’s return to work is authorized; and
- a mechanism to ensure community participation in the monitoring process.
“This settlement represents a renewed commitment by the city of Miami and Chief Rodolfo Llanes to provide constitutional policing for Miami residents and to protect public safety through sustainable reform,” said Principal Deputy Assistant Attorney General Gupta. “The agreement will help to strengthen the relationship between the MPD and the communities they serve by improving accountability for officers who fire their weapons unlawfully, and provides for community participation in the enforcement of this agreement.”
“Today's agreement is the result of a joint effort between the Department of Justice and the City of Miami to ensure that the Miami Police Department continues its efforts to make our community safe while protecting the sacred Constitutional rights of all of our citizens,” said U.S. Attorney Ferrer. “Through oversight and communication, the agreement seeks to make permanent the positive changes that former Chief Orosa and Chief Llanes have made, and we applaud the City Commission’s vote.”
The settlement agreement builds upon important reforms implemented by the city since the Justice Department issued its findings, including:
- transfer of responsibility for criminal investigations of officer involved shootings from the MPD Homicide Unit to the Florida Department of Law Enforcement;
- downsizing of the Tactical Operations Section, which included some of the more aggressive specialized units; and
- creation of High-Liability Review Board to review problematic incidents.
The investigation was conducted by attorneys and staff from the Civil Rights Division’s Special Litigation Section and the Civil Division of the U. S. Attorney’s Office of the Southern District of Florida.
Jury Convicts Memphis Man for Sex Trafficking of MinorsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that a federal jury has convicted TIMOTHY JONES, a/k/a “Lucci,” “King Lucci,” “Lucci Loco,” age 25, from Memphis, for his role in sex trafficking two minors into the New Orleans area for the purposes of those minors engaging in prostitution. The jury convicted JONES on all eight counts with which he was charged, including conspiracy to commit sex trafficking, sex trafficking two minor females through the use of force, fraud, and coercion, transporting a minor across state lines for the purpose of her engaging in prostitution.
“As proven at trial, Jones engaged in the sex trafficking of minors and used violence as a means of coercion,” stated U.S. Attorney Polite. “He will now spend at least 15 years in prison for his reprehensible actions.”
According to evidence presented at trial, in early December 2013, JONES met and began recruiting Minor Victim 1, a 17-year-old female from Baton Rouge, to work for him in prostitution, performing numerous “dates” per day, based on quotas he set for her. For approximately three weeks, Minor Victim 1 worked for him, before escaping the New Orleans area.
In early January 2014, JONES and a co-conspirator recruited Minor Victim 2, a sixteen-year-old female, in Memphis and coerced her to work for him in prostitution. JONES then took Minor Victim 2 to Louisville, Kentucky, to work in prostitution. Thereafter, JONES transported Minor Victim 2 to New Orleans to work for him in prostitution. Minor Victim 2 worked for JONES until February 11, 2014, when a United States Marshals Task Force recovered her and arrested JONES at a hotel in downtown New Orleans.
JONES required Victim 1 and Victim 2 to give him all of the money they earned from engaging in prostitution. JONES advertised prostitution dates with Victim 1 and Victim 2 using an online classified website and also forced them to solicit prostitution dates on Bourbon Street and on Chef Menteur Highway. JONES “paid” Minor Victim 1 a total of $10 for her work. JONES instructed both victims on how much to charge for sex, how to solicit “dates,” and how to avoid detection by law enforcement. He also instructed them to steal credit cards, wallets, cash, and other valuables from customers. Other females testified at trial that JONES exploited them in a similar manner.
JONES used a variety of means to control his victims, whom he knew were minors. JONES beat Victim 1 and Victim 2 to punish them for disrespecting him or not earning enough money. He also slapped and punched them to keep them from leaving him. Further, while in front of Minor Victim 1 and Minor Victim 2, JONES brutally beat other females who worked for him as prostitutes as a means of threatening and intimidating his minor victims into complying with his demands.
JONES faces a mandatory minimum term of imprisonment of fifteen years and a maximum sentence of life in prison for his crimes. Sentencing before Judge Martin L.C. Feldman has been scheduled for June 29, 2016, at 1:30 pm.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation – New Orleans Division and the United States Department of Homeland Security – Homeland Security Investigations, with cooperation from the FBI’s Memphis Field Office in investigating this matter. Assistant United States Attorneys Jordan Ginsberg and Jonathan L. Shih were in charge of the prosecution.
Honduran Man Guilty of Illegally Reentering the United States After Two Previous DeportationsRead the Press Release
CONCORD, NEW HAMPSHIRE – Douglas Mejia-Romero, of Honduras, pleaded guilty to illegally reentering the United States after having been previously deported to Honduras, announced United States Attorney Emily Gray Rice.
On June 11, 2015, Douglas Mejia-Romero appeared at a Manchester office of the New Hampshire Division of Motor Vehicles (DMV) and attempted to obtain a New Hampshire driver’s license. Mejia-Romero applied for the license using a false identity and possessed documents that purported to be a birth certificate establishing his birth in Puerto Rico, a certified driving record from the Department of Transportation in Puerto Rico, a driver’s license issued in Puerto Rico and a social security card issued in the name of the false identity. A New Hampshire State Trooper began questioning Mejia-Romero about the documents and sought the assistance of United States Immigration and Customs Enforcement and Removal Operations officers.
Two ICE-ERO officers responded to the DMV office and identified themselves to Mejia-Romero. The officers advised Mejia-Romero that they would be taking his fingerprints and would soon find out his true identity. At that time, the defendant admitted to the officers that his true name was Douglas Mejia, that he had been previously deported and that he had no documents allowing him to legally be in the United States. Subsequent fingerprint tests and investigation confirmed that the defendant was, in fact, Douglas Mejia-Romero from Honduras, and that he had been previously deported from Texas and from Florida to Honduras.
A sentencing hearing is scheduled for June 1, 2016. Mejia-Romero will again be deported after serving his sentence.
The case was investigated by the Department of Homeland Security and the New Hampshire State Police and is being prosecuted by Assistant U.S. Attorney Alfred Rubega.
Harris County Residents Arrested on East Texas Drug Trafficking ChargesRead the Press Release
BEAUMONT, Texas - U.S. Attorney John M. Bales announced today that seven individuals have been arrested following a lengthy investigation into drug trafficking in the Eastern and Southern Districts of Texas.
On Feb. 24, 2016, a combined task force of federal, state and local law enforcement executed federal arrest warrants in Harris County as a result of a joint investigation by the Bureau of U.S. Drug Enforcement Administration, Galveston Police Department, Federal Bureau of Investigation, U.S. Marshals Service, Office of Homeland Security, Texas Department of Public Safety – Texas City, Customs and Border Protection – ERO and MIA, Galveston County Sheriff’s Office, Harris County Sheriff’s Office, Dickinson Police Department, League City Police Department, Webster Police Department, Brazoria County Sheriff’s Office, Pearland Police Department, Houston Police Department, and Texas National Guard.
The operation resulted in the arrest of seven out of 12 defendants in two separate indictments returned by a federal grand jury on Feb. 3, 2016. According to one of the indictments, from December 2010 until June 30, 2015, the defendants conspired to distribute methamphetamine in East Texas and elsewhere. Those arrested and named in the indictment are:
JESUS NAJAR SILVA, 40,
ROLANDO DELAROSA, JR., 21, and
ADRIANA DANIELLE GARAMILLO, 21.
According to the other indictment, from March 2014 until present, the defendants conspired to distribute methamphetamine in East Texas and elsewhere. The indictment also charges two of those defendants with conspiring to distribute heroin. Those arrested and named in the indictment are:
JAIME CRUZ ROMERO, 32, a/k/a Panfilo Sacais, a/k/a Jaime Carrillo, and a/k/a Jaime;
PEDRO DUARTE, JR., 23, a/k/a Peches;
JUAN DUQUE-TINOCO, 44; and
ALEJANDRO AVILEZ GOMEZ-PENALOZA, 45, a/k/a Gordito.
All of the defendants are residents of the Harris County, Texas area. During the arrests, authorities seized approximately 20 grams of methamphetamine, approximately $8,500 in cash, and three vehicles. If convicted, the defendants face as much as life in federal prison.
These cases are the result of ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigations, Operation Dream Catcher, Operation The Walking Dead and Operation Tickle, and part of a concerted investigation with simultaneous arrests and charges of other defendants in the Southern District of Texas and Western District of Texas. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
These cases are being investigated by DEA, HSI-OHS, Galveston Police Department, Galveston County Sheriff’s Office, Houston Police Department and Harris County Sheriff’s Office, Longview Police Department, and Gregg County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Michelle Englade.
Other arrests and federal charges related to Operation Dream Catcher have taken place today in the Southern District of Texas and the Western District of Texas.
An indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Gallup Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Dexter Diaz, 31, of Gallup, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of his plea agreement, Diaz will be sentenced within the range of 120 to 144 months in federal prison followed by a five year term of supervised release.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, McKinley County Sheriff Ronald Silversmith, and Chief Timothy Trimble of the Zuni Pueblo Tribal Police Department.
Diaz, whose criminal history includes felony convictions for three drug trafficking crimes, is being prosecuted as part of the federal “worst of the worst” anti-violence initiative. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior felony convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including McKinley County, under this initiative.
Diaz was arrested in Sept. 2015, on an indictment charging him with distributing methamphetamine on March 26, 2015, in McKinley County, N.M. The indictment included forfeiture allegations requiring Diaz to forfeit $1,600 in drug proceeds to the United States.
During today’s proceedings, Diaz entered a guilty plea to the indictment. In entering the guilty plea, Diaz admitted that on March 26, 2015, he sold two ounces of methamphetamine to another person for $1,600.
Diaz has been in federal custody since his arrest and remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA, the McKinley County Sheriff’s Office and the Zuni Pueblo Tribal Police Department. Assistant U.S. Attorney Nicholas Jon Ganjei is prosecuting the case.
Former Tifton Banking Company CEO and President SentencedRead the Press Release
A former bank president was sentenced today for his role in a bank fraud scheme in which he hid underperforming and at-risk loans from the bank, the Federal Deposit Insurance Corporation (FDIC), and others, announced Acting U.S. Attorney G.F. Peterman, III of the Middle District of Georgia.
Gary Patton Hall Jr., 49, of Tifton, Georgia, was sentenced by Senior U.S. District Court Judge Hugh Lawson in Valdosta, Georgia to serve 84 months in prison for conspiracy to commit bank fraud and conspiracy to commit fraud against the United States. Mr. Hall was also ordered to pay restitution in the amount of $3,931,018 to the Federal Deposit Insurance Corporation (FDIC), as the successor in interest to the bank, and to the Small Business Administration and the U.S. Department of Agriculture, as guarantors on fraudulent loans.
Mr. Hall entered a guilty plea to the charges on December 4, 2015. According to facts stipulated in the plea agreement, Mr. Hall was the president and Chief Executive Officer of Tifton Banking Company (TBC) from August 2005 until June 2010. During that time, Mr. Hall was engaged in an ongoing scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses. As part of the scheme, Mr. Hall hid past due loans from the FDIC and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking. Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.
Mr. Hall admitted that in certain transactions in which he exercised approval authority, he hid his personal and business interests. In one instance, Mr. Hall approved loans to the buyer of a condominium in Panama City Beach, Florida, owned by Mr. Hall himself. In doing so, he made false representations about the loans to TBC’s loan committee and failed to disclose his personal interest in the transaction. When the buyer’s loan payments became delinquent, Mr. Hall hid the loans from both the FDIC and state regulators. Mr. Hall received $50,000 profit from the sale of his condominium in this transaction, the entire purchase price being funded by an unsecured loan to the buyer approved by him. The buyer eventually declared bankruptcy, resulting in a loss of more than $400,000 to TBC.
Additionally, Mr. Hall admitted to making fraudulent representations which led to loan guarantees being issued by the United States Small Business Administration and the United States Department of Agriculture on two other loan transactions. The loans were made by TBC, and guaranteed by the government agencies, to refinance earlier non-performing loans made by TBC. Those guaranteed loans resulted in losses to the bank and the agencies of more than $2,000,000.
TBC was closed by the Georgia Department of Banking and Finance in November 2010 due to its poor financial condition. At that time, TBC had not repaid the $3,800,000 it received from the Department of Treasury’s Troubled Asset Relief Program.
Acting United States Attorney G.F. Peterman, III said, “As the president of the Tift Banking Company, Gary Patton Hall owed a duty to its depositors to protect and care for their money more carefully than if it were his own; instead, he used it like it was his own. His self-dealing and dishonesty violated the trust his own community and neighbors had placed in him, causing harm to them and to the reputation of the banking industry itself. I commend the federal and local authorities who investigated this case and brought Mr. Hall to justice for his violation of that trust.”
“Today, another TARP banker was sentenced to jail for hiding a bank’s past due loans during the crisis to make the bank appear healthy,” said Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP). “SIGTARP special agents working with prosecutors at the U.S. Attorney’s Office in the Middle District of Georgia and other law enforcement partners uncovered that Tifton Banking Company President and CEO Pat Hall engaged in a long running fraud scheme that began pre-crisis in 2005. He made risky bank loans pre-crisis, and later criminally concealed the fact that the loans were past due and that the collateral had dropped in value. On behalf of the bank, in 2009, Hall obtained $3.8 million in TARP bailout funds to fill holes in the bank’s books caused by his fraud, all of which was lost when the bank failed. He deceived taxpayers, shareholders including Treasury, banking regulators and the bank’s loan committee. TARP was not a bailout for bank fraud and SIGTARP and our law enforcement partners will ensure that bankers who commit fraud related to TARP will be brought to justice.”
"The FDIC Office of Inspector General is pleased to join the U.S. Attorney's Office and our law enforcement colleagues in announcing Mr. Hall's sentencing. This sentence is fitting punishment for a former bank insider who violated the public trust and caused harm to the bank. Our expectation is that his sentencing will deter others who would seek to undermine the integrity of the banking system. Our office remains committed to helping ensure the safety and soundness of FDIC-insured banks throughout the country," Jason T. Moran, Special Agent in Charge, Atlanta Region, FDIC Office of Inspector General, stated.
“The defendant’s actions placed his self-interest and personal gain above others to which he had a responsibility resulting in significant loss to the taxpayer,” said Inspector General Peggy E. Gustafson. “The Office of Inspector General will aggressively pursue fraud, waste, or abuse against SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication in pursuing justice in this case.”
The case was investigated by the FBI, the Special Inspector General for the Troubled Asset Relief Program, the Small Business Administration’s Office of the Inspector General, the Federal Deposit Insurance Corporation’s Office of the Inspector General, the Department of Agriculture’s Office of Inspector General and the Tift County Sheriff’s Office. The case is being prosecuted by Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Former President and CEO of Georgia-Based Bank Sentenced to 84 Months in Prison for Role in Bank Fraud ConspiracyRead the Press Release
A former president and CEO of a Georgia-based bank was sentenced today to 84 months in prison for his role in a conspiracy to commit bank fraud and major fraud against the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia made the announcement.
Gary Patton Hall Jr., 50, of Tifton, Georgia, was sentenced by Senior U.S. District Judge Hugh Lawson of the Middle District of Georgia. In addition to imposing the prison term, Judge Lawson ordered Hall to pay $3,931,018 in restitution to the bank and federal agencies for losses suffered. In December 2015, Hall pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit major fraud against the United States.
According to court documents, Hall was the president and CEO of Tifton Banking Company (TBC) from August 2005 until June 2010. As part of his guilty plea, Hall admitted that he engaged in a scheme to mislead the bank and its loan committee about loans that TBC made to local individuals and businesses. Hall hid past-due loans from the Federal Deposit Insurance Corporation (FDIC) and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking, he admitted. Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.
At his plea hearing, Hall admitted that in certain transactions in which he exercised approval authority, he made false representations about the loans to TBC’s loan committee and hid his personal and business interests, including approving loans to the buyer of a condominium in Panama City Beach, Florida, owned by Hall himself. Hall admitted that he hid the loans from the FDIC and state regulators when the buyer’s payments became delinquent, and that he received $50,000 profit from the sale of his condo. The buyer eventually declared bankruptcy, resulting in a loss of more than $400,000 to TBC.
Hall also admitted to making fraudulent representations that led to commercial loan guarantees being issued by the U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) on two other loan transactions. The loans were made by TBC and guaranteed by the government agencies to refinance earlier non-performing commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank’s true financial condition. Those guaranteed loans resulted in more than $2 million in losses to the bank and the agencies.
In November 2010, the Georgia Department of Banking and Finance closed TBC because of its poor financial condition. At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program (TARP).
The FBI, the Special Inspector General for TARP, the SBA’s Office of the Inspector General, the FDIC Office of the Inspector General, the USDA’s Office of Inspector General and the Tifton County Sheriff’s Office investigated the case. Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia prosecuted the case.
Former Iberia Parish Sheriff’s Office employee pleads guiltyRead the Press Release
LAKE CHARLES, La. – Principal Deputy Assistant Attorney General Vanita Gupta and U.S. Attorney for the Western District of Louisiana Stephanie A. Finley announced today that a former employee of the Iberia Parish Sheriff’s Office pleaded guilty to his role in an inmate beating at the Iberia Parish Jail.
Jesse James Hayes, 36, of St. Martinville, La., pleaded guilty before U.S. District Judge Patricia Minaldi to one count of deprivation of civil rights.
Hayes faces 10 years in prison, three years of supervised release and a $250,000 fine.
The FBI and the U.S. Department of Justice, Civil Rights Division, participated in the investigation. Assistant U.S. Attorney Joseph G. Jarzabek, and Special Litigation Counsel Mark Blumberg and Trial Attorney Tona Boyd of the U.S. Department of Justice, Civil Rights Division, are prosecuting the case.
Former Christian County Sheriff Sentenced for Stealing Public Money, Money LaunderingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former sheriff of Christian County, Mo., was sentenced in federal court today for embezzling county funds and for his role in laundering the proceeds of a political supporter’s investment fraud scheme.
Joseph “Joey” Edward Kyle, 54, of Ozark, Mo., was sentenced by U.S. District Judge Beth Phillips to one year and one day in federal prison. The court also ordered Kyle to pay $50,290 in restitution to Christian County and forfeit to the government a money judgment of $71,640, representing the proceeds he received from his criminal conduct. Kyle must disclose and surrender any and all property that was purchased with county funds, including firearms, ammunition, vehicles, equipment, preserved food (meals-ready-to-eat) and other supplies.
On May 20, 2015, Kyle pleaded guilty to one count of embezzling from Christian County and one count of participating in a money-laundering conspiracy. As required under the terms of his plea agreement, Kyle resigned his office as sheriff of Christian County, to which he was elected in 2008 and reelected in 2012.
Christian County Embezzlement
Kyle admitted that he embezzled $50,290 from Christian County. Kyle submitted 22 fraudulent invoices and purchase orders to the county for goods and services that were never provided between Jan. 1, 2011, and Oct. 14, 2014.
Kyle submitted those requisitions on behalf of EDI Plus, LLC, in Nixa, Mo. EDI was awarded a contract by the county to provide equipment – including firearms and ammunition – for the sheriff’s department from 2011 to 2014. Kyle received cash from EDI for his personal use then submitted fraudulent requisitions for goods and services purportedly supplied by EDI. In reality, no goods or services were provided; instead, these requisitions repaid EDI for the money Kyle personally received.
Pretrial Diversion Agreement: Stephen R. Eidson
Stephen R. Eidson, the owner of EDI, has not been charged in relation to Kyle’s theft of public funds but has entered into a pretrial diversion agreement with the U.S. Attorney’s Office.
Eidson acknowledged his role aiding and abetting Kyle in the fraud scheme in which Christian County taxpayers repaid EDI for the personal funds that he had provided to Kyle. In return, Eidson obtained the continued business of the Christian County Sheriff’s Department.
Under the terms of the pretrial diversion agreement, Eidson must surrender his federal firearms license no later than June 30, 2016. He may not become a federal firearms licensee at any point in the future and may not reapply for licensure. Eidson also must publicly apologize for the theft of public funds and complete 100 hours of community service within Christian County.
Prosecution shall be deferred for one year, provided Eidson abides by the conditions and the requirements of the pretrial diversion agreement. If Eidson violates the conditions of the agreement, the U.S. Attorney may initiate prosecution for the theft of public funds.
Money Laundering Conspiracy
Kyle also admitted that he received $21,350 from another person, identified as “Subject #2” in court documents, for his role in promoting an investment fraud scheme.
According to the plea agreement, Subject #2 owned and operated various companies and, from January 2008 to October 2014, engaged in an investment fraud scheme. Subject #2 solicited Kyle to assist him as a promoter of the scheme, to take advantage of the authority and prestige of Kyle’s position as county sheriff. Kyle referred potential investors, distributed promotional materials, served as a personal reference and recommended that victims invest money in Subject #2’s companies.
In order to persuade potential investors, Subject #2 falsely informed them that Kyle had personally invested funds and that Kyle had assembled an investment group, comprised of deputy sheriffs and others, to invest in Subject #2’s companies. In reality, Kyle did not invest his personal funds in Subject #2’s companies. Instead, Subject #2 gave Kyle 50,000 shares in one of his companies, which Subject #2 normally sold to investors at the rate of one dollar per share.
Kyle founded Five Rivers Management, LLC, purportedly as a law enforcement training company in 2011. He deposited the money he received from Subject #2 into the company’s bank account in order to conceal the source and nature of the payments, and to make them appear to be receipts from Kyle’s law enforcement training company. Subject #2 also made a $3,000 contribution, using victim investor funds, to Kyle’s political campaign on July 1, 2012.
Between June 2012 and January 2014, Subject #2 received investment funds totaling approximately $952,670. At the time he promoted the investment fraud scheme, Kyle states that he believed Subject #2’s companies were legitimately engaged in efforts to bring their products to market. However, Kyle admitted the United States could prove that he knew checks written to Five Rivers were the proceeds of some form of unlawful activity. Further, Kyle acknowledged that, at the very least, he deliberately closed his eyes to the fraud, which should have been obvious to him.
This case was prosecuted by Assistant U.S. Attorneys James J. Kelleher and Steven M. Mohlhenrich. It was investigated by the FBI, IRS-Criminal Investigation and the Missouri State Highway Patrol.
Final defendant sentenced to four years in Federal prison for role in counterfeiting ringRead the Press Release
BECKLEY, W.Va. – An Ohio woman was sentenced to four years in federal prison for three counts of passing counterfeit money, announced Acting United States Attorney Carol Casto. Paula K. Green, 42, of Columbus, previously pleaded guilty to the federal counterfeiting crimes in October 2015.
Green admitted to passing counterfeit $100 bills in April 2014 in the Beckley and Charleston areas. In the Beckley area, Green passed counterfeit bills at several businesses, including businesses in the Crossroads Mall, as well as at K-Mart at the Plaza Mall off Robert C. Byrd Drive. In Charleston, Green passed counterfeit bills at K-Mart on MacCorkle Avenue.
As a result of this investigation, three other women have been sentenced for their roles in the counterfeiting scheme. Nyteria Green, of Columbus and the half-sister of co-defendant Paula Green, was sentenced in December 2015 to three years in federal prison. O’wynn Rogers, of Beckley, was sentenced in December 2015 to one year in federal prison. Nyteria Green and Rogers both admitted to passing counterfeit $100 bills in April 2014 at several businesses around Beckley, including businesses in the Crossroads Mall, as well as at the IHOP on Harper Road. Kenyata Smith, of Beckley, was sentenced in October 2015 to two years of probation for passing counterfeit money in April 2014 at a Dairy Queen in Beaver.
The investigation of these cases was conducted by the United States Secret Service. Assistant United States Attorney Eric Bacaj is handling the prosecution. United States District Judge Irene C. Berger imposed the sentences.
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Fayetteville Arkansas Man Sentenced in Federal Tax CrimeRead the Press Release
Fayetteville, Arkansas - A Fayetteville, Arkansas man was sentenced to 14 months in prison following his plea of guilty to four counts of willfully failing to file individual income tax returns, announced Acting U.S. Attorney Kenneth Elser of the Western District of Arkansas and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents, Randall Acton West, a former real estate appraiser, failed to file federal income tax returns with the Internal Revenue Service (IRS) for the years 2007 through 2010 despite earning gross income in excess of the tax return filing threshold. According to court documents, West’s conduct resulted in a tax loss to the government of $95,825.56.
West was sentenced on February 24, 2016 by U.S. District Judge Timothy L. Brooks of the Western District of Arkansas. In addition to the prison sentence, West was ordered to serve one year of supervised release and pay restitution to the IRS in the amount of $95,825.56.
Acting U.S. Attorney Elser and Acting Assistant Attorney General Ciraolo commended special agents of IRS – Criminal Investigation, who investigated the case and Trial Attorneys Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, and Robert Kemins and David Zisserson of the Tax Division, who prosecuted the case.
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Related court documents may be found on the Public Access to Electronic Records Website at www.Pacer.gov